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Effect of taxes and financial incentives on family-owned forest landAuthor(s): John L. Greene; Thomas J. Straka; Tamara L. Cushing
Source: In: Wear, David N.; Greis, John G., eds. 2013. The Southern Forest Futures Project: technical report. Gen. Tech. Rep. SRS-GTR-178. Asheville, NC: USDA-Forest Service, Southern Research Station. 261-292.
Publication Series: Paper (invited, offered, keynote)
Station: Southern Research Station
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- Federal and State taxes reduce the pre-tax value of family-owned forest land in the South by amounts ranging from little more than one-quarter to nearly half, with the greatest share of the reduction attributable to the Federal income tax and State property taxes.
- Most family forest owners are aware of some general business provisions of the Federal income tax, but half or fewer are aware of provisions specifically for forests and other working lands, such as the reforestation incentives and special treatment of qualifying cost-share payments.
- For family forest owners who do not grow timber for sale, State property taxes are of greater concern than any other tax, because they occur annually and are perceived as being high in relation to the value of the land.
- State-to-State variability in property taxes produces relative disadvantages to holding forest land and likely contributes to conversion of family-owned forest land in States that tax property at higher rates.
- Owners of family forests and other working lands are many times more likely than U.S. taxpayers in general to incur the Federal estate tax. Of the forest estates that owe estate tax, 40 percent sell timber or land to pay part or all of the tax, with roughly one-quarter of the acres sold converted to other uses.
- Financial incentive programs are generally successful in promoting sustainable practices among the family forest owners who participate in them, but funding levels and owner confusion about the requirements to apply for and participate in the programs limit the number of acres that are treated.
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CitationGreene, John L.; Straka, Thomas J.; Cushing, Tamara L. 2013. Effect of taxes and financial incentives on family-owned forest land. In: Wear, David N.; Greis, John G., eds. 2013. The Southern Forest Futures Project: technical report. Gen. Tech. Rep. SRS-GTR-178. Asheville, NC: USDA-Forest Service, Southern Research Station. 261-292.
- Family forest owners and federal taxes
- Nonindustrial private forest owner use of federal income tax provisions
- Estate planning for forest landowners: what will become of your timberland?
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